Strategic Choice Frameworks
6.2.1 - The Strategist's Toolkit
Master the four strategic decision-making tools that every Lead Examiner expects: Ansoff Matrix (Growth), Force Field Analysis (Change), Decision Trees (Financial Risk), and Blue Ocean Strategy (Competition).
The Ansoff Matrix
Strategic Growth Framework by Igor Ansoff (1957)
AO1 Definition:
The Ansoff Matrix is a strategic planning tool that helps businesses analyze growth opportunities based on product novelty (existing vs new) and market novelty (existing vs new). It identifies four growth strategies with increasing levels of risk.
Market Penetration
LOWEST RISKSell MORE of the SAME product to the SAME customers
Example: Coca-Cola runs "Buy 2 Get 1 Free" promotions
Market Development
MEDIUM RISKSell the SAME product to NEW markets/customers
Example: Starbucks opening stores in China
Product Development
MEDIUM RISKSell NEW products to EXISTING customers
Example: Apple launching AirPods for iPhone users
Diversification
HIGHEST RISKSell NEW products to NEW markets (Completely new territory)
Example: Amazon entering cloud computing (AWS)
Strategic Placement Exercise
Drag each business scenario to the correct Ansoff quadrant:
Apple
Sell more iPhones in USA
Apple
Sell iPhones in Africa
Apple
Launch Apple Car
Netflix
Create original series for existing subscribers
Market Penetration
Existing Product → Existing Market
LOW RISKMarket Development
Existing Product → NEW Market
MEDIUM RISKProduct Development
NEW Product → Existing Market
MEDIUM RISKDiversification
NEW Product → NEW Market
HIGH RISKLead Examiner Insight
In evaluation questions, ALWAYS link Ansoff to RISK vs REWARD. Level 4 answers explain: "While diversification offers high growth potential (NEW markets = untapped revenue), the business lacks experience in BOTH the product AND market, increasing failure probability. Market penetration is safer but growth is LIMITED by market saturation."
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